Mishcon Purpose's Laurence Doering was joined by Eline Zeilmaker, Senior Legal counsel at Milieudefensie, to discuss the November 2024 judgment handed down by the Dutch Court of Appeal in Milieudefensie's landmark climate case against Shell plc.
Key takeaways
Although the Court of Appeal quashed the specific emission reduction order against Shell, it confirmed key legal findings made by the District Court and added new ones of its own. In sum, the ruling imposes significant legal duties on corporate actors to take action against climate change.
Eline highlighted the following four findings:
1. Corporate duty to reduce emissions
The court confirmed that protection against dangerous climate change is a human right and that companies have a duty of care under Dutch law to protect that right by reducing their Scope 1, 2, and 3 emissions. In particular, the Court held that Shell had influence and control over its Scope 3 emissions, i.e. the emissions caused by consumers when they use oil and gas products sold by Shell.
2. Compliance with national legislation is not always enough
The ruling clarified that companies' compliance with domestic sustainability legislation, such as the European Union's Emissions Trading System (ETS) and Corporate Sustainability Due Diligence Directive (CSDDD), does not indemnify them against further obligations. Civil courts can impose more extensive obligations based on the duty of care in tort law.
3. New oil and gas investments are at odds with the Paris Agreement
The Court suggested that investments in new oil and gas fields may conflict with companies' duty pursue the goals of the Paris Agreement. This finding provides a foundation for future climate litigation against such investments. In this regard, Eline highlighted Milieudefensie's ongoing case against ING bank, challenging its investments in new oil and gas projects.
4. Courts' powers over corporate transition plans
Courts have the power to order companies to take specific measures to meet their duty of care in respect of climate change. The argument that this should be left to democratic governments was rejected. While the Court of Appeal declined to use that power in this case, the finding provides a basis for future climate litigation.
International relevance
The Court's finding that corporations have a duty to prevent dangerous climate change was based on its interpretation of international "soft law" instruments (such as the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights). This suggests that courts in other countries could make similar findings in the future.
Appeal to the Supreme Court
Milieudefensie is considering an appeal to the Dutch Supreme Court. It has an absolute right of appeal (in contrast to jurisdictions like England where permission must be sought from the court). Milieudefensie has until 12 February 2025 to file an appeal if it chooses to do so.